BlackRock turns bearish on long-term Treasuries as AI funding wave looms

Economic

Summary:

BlackRock turned bearish on long-term Treasuries, warning massive AI-related borrowing will push rates higher amid record U.S. debt. While bullish on AI-driven equities, it prefers emerging-market debt and stays cautious on Japan’s bonds.

The BlackRock Investment Institute said on Tuesday it is turning bearish on long-term U.S. Treasuries, warning a coming wave of AI-related financing could put upward pressure on U.S. borrowing costs and exacerbate worries over U.S. government indebtedness.

In recent weeks, investors have been zeroing in on how big tech’s push into AI will likely mean hundreds of billions in new debt over the coming years. The added leverage is not expected to seriously dent the sector’s still strong balance sheets, but the borrowing spree is unfolding against a backdrop of already elevated public debt in the U.S. and other developed markets, stoking broader concerns about rising leverage across the financial system.

"Higher borrowing across public and private sectors is likely to keep upward pressure on interest rates," BII, a division of U.S.-based BlackRock focused on investment research, said in a 2026 global investment outlook report.

It said it turned "underweight" on long-term Treasuries for the next six to 12 months from a previous "neutral" view.

"A structurally higher cost of capital raises the cost of AI-related investment and affects the broader economy," it said. "A more leveraged system also creates vulnerabilities to shocks such as bond yield spikes tied to fiscal concerns or policy tensions between managing inflation and debt servicing costs." U.S. national debt is at a record high of over $38 trillion.

The institute's investment outlooks are based on views from senior portfolio managers and investment executives at BlackRock, the world's largest asset manager.

While an AI-driven productivity boom could eventually support government revenue and therefore ease the U.S. debt burden, such a process will take time, it said.

BlackRock remains optimistic that AI-related investments will continue to propel U.S. equities higher next year, said the institute. But while it expects AI-driven revenue gains to lift the economy broadly, it also anticipates that technological advances will benefit some companies more than others.

"Entirely new AI-created revenue streams are likely to develop. How those revenues are shared is likely to evolve – and we don’t yet know how. Finding winners will be an active investment story," it said.

Outside of the U.S., BlackRock turned more underweight for the next six-to-12-month period on Japanese government bonds due to the prospect of higher interest rates and heavier bond issuance.

On the other hand, it changed to an "overweight" view on emerging-market hard-currency debt from a previous "underweight" view, due to limited issuance and healthy government balance sheets.

Source: reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Justin

Central Bank

President Donald Trump said he plans to announce his selection to lead the Federal Reserve in early 2026, fueling further speculation about the next leader of the US central bank.

"We'll be announcing somebody, probably early next year, for the new chairman of the Fed," Trump said Tuesday during a Cabinet meeting at the White House.

Trump's comments offer a clearer timeline for the announcement. Treasury Secretary Scott Bessent, who has been overseeing the selection process, previously said the pick could be revealed around Christmas.

The president on Sunday told reporters he knew who he would nominate, without offering further details.

Trump for months has pressured the Fed to lower interest rates, and naming a successor to Jerome Powell, whose term as Fed Chair expires in May, would give the president his biggest chance yet to reshape the institution. Trump has criticized Powell as being too slow and timid in pursuing cuts, and the president has signaled he expects his replacement to move more forcefully to lower rates.

Trump repeated those criticisms Tuesday, calling Powell a "stubborn ox, who probably doesn't like your president." Though Powell's term as chair ends next year, he could remain on the board for two more years as a governor.

White House National Economic Council Director Kevin Hassett is seen as the likely choice to succeed Powell, people familiar with the matter told Bloomberg News last week.

Still, Trump is known to make surprise personnel and policy decisions, meaning a nomination is not final until it's made public. Other finalists have included Fed Governors Christopher Waller and Michelle Bowman, former Fed Governor Kevin Warsh and BlackRock's Rick Rieder.

Trump in September singled out Hassett, Warsh and Waller as his top three candidates. Trump also regularly says he'd like Bessent as chair, though the Treasury secretary has repeatedly rejected the notion.

Fed chair and governor picks typically represent the most direct way for presidents to influence the central bank. But Trump has been vocal in criticizing the Fed for moving too slowly to cut borrowing costs and for expensive renovations of its campus. The White House also is engaged in litigation over Trump's attempted dismissal of Fed Governor Lisa Cook.

Whomever Trump picks will require Senate confirmation as chair. If the selection is an outsider, the person would likely receive a 14-year Fed governor term that begins Feb. 1.

Source: Bloomberg Europe

Risk Warnings and Disclaimers

Add to Favorites

Adam

Cryptocurrency

Bitcoin climbed back above $90,000 on Tuesday, recovering from a bruising selloff that caught Wall Street off guard and erased nearly $1 billion in fresh leveraged bets. The rebound offered a brief respite in a months-long rout, but traders remain cautious, with sentiment still fragile and signs of stress persisting across crypto markets.

The original cryptocurrency rallied as much as 5.6% to $91,269, while its next biggest rival - Ether - rebounded by more than 8% to push its price back above $3,000. Smaller, less liquid tokens such as Cardano and Chainlink jumped more than 10%. Even so, several metrics point to a potentially uneven recovery, market watchers said.

The Bitcoin funding rate — a key measure of crypto market sentiment — has turned negative in the last few days, according to CryptoQuant, meaning there is more demand for bearish bets in the perpetual futures market than for bullish positions.

Bitcoin Jumps Back Above $90,000 After Bruising Selloff_1

“Overall sentiment is cautious,” said Chris Kim, chief executive of quantitative asset management protocol Axis. “Crypto-native traders are nervous.” Institutional investors, meanwhile, appear to be waiting for the Federal Reserve’s interest rate decision next week before adding risk, he said.

Bitcoin has fallen almost 30% since hitting a record in early October, leaving the digital asset market on fragile footing after a weeks-long selloff. The downturn accelerated when roughly $19 billion in leveraged bets were wiped out.

Virtual currencies associated with US President Donald Trump’s family have been caught up in the selloff. Shares of American Bitcoin Corp., the crypto miner co-founded by Eric Trump, wiped out more than half of their value in less than 30 minutes on Tuesday, even as trading in the stock was halted multiple times due to intense volatility. The stock fell as much as 51%.

TRUMP, his official memecoin, collapsed from a record high of around $73.40 right after its launch in January. It’s now trading at around $6, according to CoinGecko. WLFI, the token of Trump-linked decentralized finance platform World Liberty Financial, is down roughly 30% from September’s high. MELANIA, the memecoin of First Lady Melania Trump, is trading at 13 cents, having lost nearly all its value since January’s peak.

‘Extreme Fear’

In another sign of investor wariness, crypto exchanges have seen balances of stablecoins such as USDT and USDC rise, suggesting traders are parking capital rather than aggressively buying dips, according to analysts at Bitfinex.

“This is typical in late-cycle corrections: investors hedge by moving into stablecoins until ETF flows stabilize and macro uncertainty clears,” the analysts said in a note. “Importantly, this is not the behaviour seen at long-term tops, where stablecoin liquidity drains; here, liquidity is building up on the sidelines, indicating dry powder waiting for clarity.”

Underscoring the investor wariness, CoinMarketCap’s “Fear and Greed Index” stood at a level indicating “extreme fear” on Tuesday, having spent the last three weeks around that zone.

Market sentiment has also been dampened by a plunge in shares of Michael Saylor’s Strategy Inc. which has led to concerns that the Bitcoin accumulator might have to sell some of its holdings. On Monday, the company sought to assuage fears by saying it had created a $1.4 billion reserve to fund future dividend and interest rate payments.

The company’s mNAV — a key valuation metric comparing the firm’s enterprise value to the value of its Bitcoin holdings — sat at about 1.16 on Tuesday, according to its website.

Source: Bloomberg

Risk Warnings and Disclaimers

Add to Favorites

Adam

Commodity

Gold and silver prices are lower in early U.S. trading Monday, on profit-taking from the shorter-term futures traders and amid improved trader/investor risk appetite in the general marketplace. Gold hit a six-week high on Monday, while silver hit a record high. February gold was last down $30.50 at $4,244.40. March silver prices were down $0.907 at $58.235.

Global stock markets were mixed overnight. U.S. stock indexes are pointed to higher openings when the New York day session begins. Risk appetite is better today, following good demand for Japanese bonds that Japan’s government held today. On Monday the global bond markets were a bit jittery because of political/financial/economic worries regarding Japan.

In other news, U.S. envoy to meet Putin in Moscow. U.S. envoy Steve Witkoff is traveling to Moscow to meet with Russian President Vladimir Putin to discuss a potential peace plan to end Russia’s war with Ukraine. Putin claimed Russian troops had taken the city of Pokrovsk in Ukraine's eastern Donetsk region, but Ukraine's military staff spokesman denied the claim. Witkoff is due to hold talks with Putin on the latest proposals for ending Russia's invasion of Ukraine, following negotiations between U.S. and Ukrainian officials in Florida this past weekend.

OECD: world economy doing better than expected. The Paris-based think tank Organization for Economic Cooperation and Development (OECD) said the global economy is weathering U.S. and other countries’ trade tariffs better than expected due to strong investment in artificial intelligence and supportive fiscal and monetary policies. The OECD raised its U.S. and European area economic growth forecasts for this year and next but still predicts global growth will slow to 2.9% in 2026 from 3.2% in 2025. The OECD cautioned that the outlook is “fragile” and its projections are “subject to substantial risks” due to concerns about swift changes in trade measures and the risk of abrupt price corrections in the tech sector.

The key outside markets today see the U.S. dollar index up a bit. Crude oil prices are slightly down and trading around $59.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.08%.

Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.

Price pressure on gold, silver amid better risk appetite_1

Technically, February gold futures bulls’ next upside price objective is to produce a close above solid resistance at the contract/record high of $4,433.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,100.00. First resistance is seen at the overnight high of $4,269.20 and then at $4,300.00. First support is seen at the overnight low of $4,210.20 and then at $4,200.00. Wyckoff's Market Rating: 7.5.

Price pressure on gold, silver amid better risk appetite_2

March silver futures bulls have the strong overall near-term technical advantage. Their next upside price objective is closing prices above solid technical resistance at $60.00. The next downside price objective for the bears is closing prices below solid support at $52.50. First resistance is seen at the overnight high of $58.475 and then at the contract high of $59.435. Next support is seen at this week’s low of $56.85 and then at $56.00. Wyckoff's Market Rating: 9.0.

Source: kitco

Risk Warnings and Disclaimers

Add to Favorites

Justin

Central Bank

In a major shift in U.S monetary policy, the federal reserve has officially ended its three year quantitative tightening (QT) program, marking one of the most significant pivots since the post pandemic economic recovery. The move signals a transition from balance sheet reduction to liquidity stabilization as the central bank seeks to maintain healthy banking system and guide inflation back towards target levels.

Source: X

Fed halts balance sheet reduction after shrinking $2.2 Trillion

The federal reserve has stopped cutting its balance sheet, ending a QT cycle that ran from 2022 to 2024. During this period, the fed allowed assets to roll off without reinvestment reducing:

$1.6 trillion in U.S treasuries
$600 billion in mortgage backed securities (MBS)

This marks one of the largest balance sheet contractions in its history and reflects the central banks attempt to reverse the excessive liquidity created during covid era stimulus.

Bank Reserves return to safe and stable levels

With QT ending, the Fed signaled the bank reserves have reached a comfortable and safe level reducing the risk of stress in short term funding assets. This is critical because excessively low reserves can trigger tightening in the repo market– a flashpoint to avoid after the volatile 2019 trading volume squeeze.

Market Expect a December rate cut as odds hit 88%

Following the policy shift, traders now see an 88% probability of a 25 bps rate cut in December. The market confidence has strengthened due to:

Easing inflation pressures
Steady labor market cooling
The Fed pivoting away from aggressive tightening

A rate cut would mark the first step towards a more accommodative environment that could support risk assets, lending activity and broader market funding conditions.

The Federal Reserve's decision to end its three-year QT cycle and shift toward liquidity support is being viewed as a bullish catalyst across the crypto assets. Traders expect improved dollar funding, higher risk appetite, and a potential December rate cut—all factors that typically boost digital assets.

With bank reserves stabilizing and preparing to add liquidity through T-bill purchases, Bitcoin and altcoins often benefit from easier financial conditions, stronger capital flows, and renewed market momentum.

If its pivot develops into a broader easing cycle, analysts anticipate increased inflows into crypto, stronger demand for risk assets, and a more favorable macro backdrop heading into the next phase.

Fed to boost liquidity through T-Bill purchases

Instead of shrinking its balance sheet further, the Federal Reserve will shift to purchasing treasury bills (T-bills) to keep reserves from failing. This approach allows the Fed to:

Stabilize the level of reserves in the banking system
Maintain flexibility in its balance sheet composition
Prevent tightening from resurging unintentionally

This move is widely seen as a strategic transition to a steady state balance sheet policy

The Fed's decision to end its three year Quantitative tightening program is a major turning point in U.S monetary strategy. With bank reserves now stable,

Expectations for a December rate cut elevated, and the central bank shifting to T-bill purchases to maintain liquidity, markets are preparing for a more supportive policy environment.

The upcoming Decision will reveal whether this pivot evolves into a full easing cycle, shaping the economic landscape in the months ahead.

Source: CryptoSlate

Risk Warnings and Disclaimers

Add to Favorites

Adam

Stocks

Boeing is continuing to express optimism about its business as the company wraps up the year and looks at 2026.

Chief Financial Officer Jay Malave said Tuesday at a UBS conference that the company expects deliveries of both its 737 and 787 jets to be up next year.

“When you now fast forward to 2026, we’re going to be increasing our deliveries,” Malave said.

Boeing’s stock rose more than 8% in midday trading Tuesday after Malave’s comments.

He added that he expects the certification for the 737-10 aircraft, which is years behind schedule, to come later in 2026.

The bolstered deliveries will be “a big driver” of cash flow as well, Malave said, with positive free cash flow expected to be in the billions in the “low single digits.” Boeing hasn’t turned an annual profit since 2018.

Malave also said the company expects that cash margins will get a “pretty significant boost” through 2030 due to the higher productivity.

Boeing has been experiencing an upward trend after a period of increased scrutiny following the blowout of a door plug on a flight in January 2024. In July, CEO Kelly Ortberg said the company was beginning to see changes in its business, including slashing its quarterly losses.

Boeing saw a strong delivery pace in October, putting it on track for its highest annual delivery total since 2018. The company said its jetliner deliveries drove it back into cash-positive territory for the first time in nearly two years in October.

Those deliveries follow a lifting of restrictions by the Federal Aviation Administration, allowing the company to sign off on some of its 737 Max and 787 Dreamliner planes before they reach customers.

Source: cnbc

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Commodity

Silver Retreats After Overextended Rally

Silver prices dropped 1.8% to $56.97 an ounce in London on Tuesday, slipping from their recent record after a powerful six-day surge. At one point during the session, silver was down as much as 2.4%, trading roughly $1.70 below its all-time high. The pullback appears to be a technical correction, rather than a shift in fundamentals, as indicators signaled that the rally had become overheated.

The 14-day Relative Strength Index (RSI) briefly crossed above 70 an important threshold suggesting overbought conditions. This reading typically signals the potential for a short-term reversal as traders reassess stretched momentum trades.

Overbought Signal Prompts a 'Natural Pullback'

Ole Hansen, Head of Commodity Strategy at Saxo Bank, described the dip as a “natural pullback” following sharp gains. He noted that the structural bull case remains intact, particularly if prices remain above the support range of $54.5–$55 per ounce. This suggests that the correction may reflect healthy consolidation within an ongoing uptrend, rather than a deeper reversal.

Silver had climbed more than 8% across just two sessions before the decline, primarily driven by expectations of tight global supply and increased speculative demand. These expectations were compounded by inventory stress in major trading hubs. While London received record inflows of silver in October to ease pressure, the Shanghai Futures Exchange now reports stockpiles at decade-low levels signaling a shift in supply tightness to Asia.

Investor Demand Driving Gains Despite Weak Physical Markets

TD Securities strategist Daniel Ghali noted that while industrial and jewelry demand expectations have declined, investment demand has taken over as the primary price driver. He added that silver's recent rally has now “moved beyond rational momentum,” citing especially weak physical trading in London’s over-the-counter market as evidence of a divergence between price action and physical fundamentals.

This shift from physical to financial demand introduces a risk of volatility, as speculative positioning can reverse quickly in response to macroeconomic news or technical triggers.

Gold-Silver Ratio Signals Possible Turning Point

The gold-silver ratio a measure of how many ounces of silver are needed to purchase one ounce of gold has dropped to its lowest point in over a year. This shift indicates silver's recent outperformance and may suggest a potential inflection point, especially for traders who watch inter-metal spreads for trend reversals.

Gold also fell on Tuesday, declining 1% to $4,191.25 per ounce, as some traders locked in gains ahead of next week's anticipated U.S. Federal Reserve policy meeting. Platinum and palladium similarly lost ground, though the Bloomberg Dollar Spot Index remained flat, implying that currency dynamics were not the primary driver of precious metal movements on the day.

Rate Cut Expectations Remain a Supportive Backdrop

Despite the correction, the macro backdrop remains supportive for precious metals. Markets are pricing in a near-certain 25-basis-point interest rate cut from the Federal Reserve at its December meeting. Since precious metals yield no income, they tend to benefit in low-rate environments where opportunity costs diminish and monetary easing boosts their appeal as alternative stores of value.

Silver's retreat from record highs reflects a temporary cooling of momentum rather than a fundamental shift in the metal’s outlook. Technical overbought signals and reduced physical demand are prompting short-term traders to take profits, but the structural narrative anchored in supply tightness and dovish central bank expectations remains supportive. As long as silver prices hold above key support levels, the broader bullish trend is likely to resume once speculative froth clears.